Editorial, continued.

   This material was presented at the Tracy Chamber of Commerce “Best Practices” seminar in February and was received with enthusiasm.

   We will also feature a pair of Tracy businesses: Tracy Awards & Embroidery and Bartoni’s Deli & Café & Catering. Both companies have successfully evolved their business strategy and their business names to expand and remain in touch with their customer.

   We feature another excellent article from the local Toastmasters club on Pacing and Pausing during presentations. This is very important in providing an effective presentation whether addressing a large audience or a small group.

   Next month we plan to feature an opportunity for people to write in with a business question and we will attempt to locate the answer. The answer will be published right here for people to read.  To ask a business questions, simply click on my name at the end of this editorial and it should bring up your mail software to send the question to us.

   Reader mail tells me the greatest issue of concern to the Tracy business community has been the slow economic recovery. Many people have written to say the economy is turning around, but it seems to be recovering more slowly than expected.  They also say it seems to be a very unpredictable recovery. People are asking why these things are happening. Many want to know when the recovery will begin to resemble a continuous expansion of business.

   Our only answer is to look at the past history of this recession and attempt to understand what has been happening. The country had entered a minor recession long before the terrorist strikes on the World Trade Center and Pentagon. These events simply took a difficult economic situation and made it worse. A series of events continued to retard the recovery until recently. Now we have a new problem that I will try to explain.

   We need to understand that recessions are emotional and not really financial. People naturally reduce spending and slow the economy when there is fear of unemployment or hard times. When we hear that things are not going well with the economy, we tend to stop spending and save money for the hard times that are coming.

   All it takes to create or lengthen a recession is to have people tell us things are bad or not improving enough. Normal attempts to inject money into the economy must be accompanied by good news about the recovery that gives hope to people and helps people feel confident about spending and stimulating the economy.

   President Bush has focused on the international implications of the war on terrorism while the country has remained somewhat stalled in a recession. Business people have seen so many false starts with the economy that they have fallen into the habit of waiting to see how the economy will evolve.

   We now have a presidential election on the horizon and we just went through the democratic primaries. The candidates must discredit the sitting president in order to attempt to defeat him in November. I predict we will experience the same economic problems that George H. Bush experienced when he was defending his job from the Clinton campaign.

   The problem is that the democrats must constantly campaign on the hardships associated with the slow economy. They will strive to incite fear in the voters who are afraid of loosing their jobs, which may very well trigger another round of economic woes for the country. The fear generated by the campaign rhetoric may worsen the economy or slow the recovery until after the election.
 

   What would it take to prevent this from occurring? The president would have to immediately shift his focus to the recovering of the economy and abandon his communication focus on the war on terrorism. We would also need a rapid acceleration of the economic recovery, which means it is probably too late to avoid the slowed recovery caused by the campaign. It should be remembered that a slow recovery benefits the democrats by providing reinforcement of their desire to make the president look bad.

  If spending is not stimulated along with tax cuts, people will often put tax refunds in the bank or buy down their debts a little. This adds to the case reserves and can actually lower interest rates by increasing the money to be lent. This leads me into the explanation of what concerns me about the current economic situation.

   President Bush has focused on the international implications of the war on terrorism while the country has remained somewhat stalled in a recession. Business people have seen so many false starts with the economy that they have fallen into the habit of waiting to see how the economy will evolve.

   We now have a presidential election on the horizon and we just went through the democratic primaries. The candidates must discredit the sitting president in order to attempt to defeat him in November. I predict we will experience the same economic problems that George H. Bush experienced when he was defending his job from the Clinton campaign.

   The problem is that the democrats must constantly campaign on the hardships associated with the slow economy. They will strive to incite fear in the voters who are afraid of loosing their jobs, which may very well trigger another round of economic woes for the country. The fear generated by the campaign rhetoric may worsen the economy or slow the recovery until after the election.

   What would it take to prevent this from occurring? The president would have to immediately shift his focus to the recovering of the economy and abandon his communication focus on the war on terrorism. We would also need a rapid acceleration of the economic recovery, which means it is probably too late to avoid the slowed recovery caused by the campaign. It should be remembered that a slow recovery benefits the democrats by providing reinforcement of their desire to make the president look bad.

   Am I making accusations that the democrats want to see the slow economy continue? Not really, but I am using these realities to suggest we will not see a strong economic recovery until after November.

Keith T. Chiles MBA

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